Devastating impact of U.S. terror on Caribbean: Severe disruption on tourism, transportation from one end of region to the other because of close relationship

CARIBBEAN BUSINESS By JOHN COLLINS

Conversations with executives in several destinations in the Caribbean graphically reflect the severe disruption being caused by the terrorist attacks in New York and Washington and the calamitous impact they are having on the entire Caribbean region with the areas most affected being tourism and transportation.

"This is a very tough situation in which we find ourselves," Barbadian hotelier Ralph Taylor, the president of the Caribbean Hotel Association (CHA), told CARIBBEAN BUSINESS. "It has already been a difficult year for us because of the global economic slow-down in general and the downturn in the U.S. in particular."

The immediate impact of the tragedy was felt in hotels, both big and small, throughout the region because of the grounding of all the airlines providing service between the U.S. and the region following the complete shutdown of U.S. airports, including San Juan and Miami.

"This complete paralysis of air transportation finds us with hotels filled with guests who want to get home but can't and incoming guests who can't get down," said Taylor. "The reaction of our guests who can't get out has been very understanding but how long are they going to feel that way? I fully expect cancellations for the next six weeks. Then we'll have to wait and see how the people in the U.S. adjust to this situation."

Offering his sympathy to the people in the States and condolences to the families of the many victims, Taylor said "this great tragedy isn't going to help us at all. My feeling is that U.S. travel to the Caribbean will be severely curtailed because most people won't want to travel and will stay close to home. I foresee a very difficult winter season."

Taylor said business people in the region "will be watching closely to see what the reaction of the U.S. government is to this assault. If it results in military action and involves the United Kingdom and other European countries that could result in further disruptions that would have a chilling impact on the Caribbean as well because so many of our visitors come from Europe."

The Barbados Advocate newspaper warned editorially that "the nature and precision of the terror inflicted can have very adverse consequences for the travel trade which is critical to tourism--the economic lifeblood of Barbados and other Caribbean countries. Activity in this sector is already causing consternation--it will certainly not be helped by cancellation of flights beyond the mandatory national shutdown that was instituted."

Shock waves in the D.R. the Dominican Republic, the destination with the largest inventory of rooms in the region (52,000+) has experienced shock waves. While the majority of its tourists have, until now, come from Europe, this year the number of people from the States has exceeded Europeans for the first time.

The number of Dominicans who have emigrated to the U.S. exceeds one million and most of them live in New York City. Because of their large numbers and their concentration in services the toll of the dead is expected to affect them disproportionately.

"I wish to express our absolute and total condemnation of those criminal acts, as well as our support at this time of anguish that your country is going through," President Hipolito Mejia of the Dominican Republic (D.R.) told President George W. Bush.

The Dominican economy is intricately linked to the U.S. with 90% of its trade being with the U.S. There is considerable anxiety in the D.R. that these incidents will inevitably contribute to reduced consumer purchases and result in further reduced exports from the country's free trade zones which have already been experiencing reduced production this year.

"This tragedy will dampen the people's desire to travel," said Simon Suarez, executive vice president of the D.R.'s Coral Resorts and the incoming CHA president. "People are going to be in a somber mood for a while and not in a vacation frame of mind."

Pointing out that the fallout from the attacks is going to be felt in other parts of the world as well, Suarez said "I don't think we'll be affected more than other areas. Great caution will definitely apply and we'll have to wait-and-see."

In the U.S. Virgin Islands, in addition to the impact on its tourism sector caused by the cutoff in air transportation, the territory's banks imposed a three-day emergency clearing period for checks drawn on other financial institutions. The step, authorized by the Federal Reserve System, followed the closure of local airports by the Federal Aviation Administration (FAA).

Air Jamaica stands to lose millions of dollars following the attacks, finding itself on the day of the attacks with six of its aircraft unable to lift off from the U.S. or stranded elsewhere. It was already forecasting a discouraging fall & winter season in the Caribbean with Air Jamaica chairman Gordon Stewart warning that the downturn, before the attacks, could result in the layoff of thousands of workers in the tourism industry this fall.

Caribbean leaders expressing profound sorrow and condolences to President Bush were the prime ministers of Antigua & Barbuda, Belize, Jamaica and St. Kitts & Nevis, among others.

November 25, 2001

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